This week sees the gathering for the World Economic Forum (WEF), a Swiss non-profit foundation based in Geneva, Switzerland. It is funded by a membership of 1,000 top companies, typically wealthy global enterprises that play a leading role in shaping the future of their industry and/or region. The WEF mission is cited as being ‘committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas’.
The WEF is best known for its annual meeting at the end of January in the snow-bound Swiss Alps region of Davos. This meeting brings together, by selection and invitation only, some 2,500 top business leaders, international political leaders, economists, celebrities and journalists for up to four days to discuss the most pressing issues facing the world. It could be said that it is a meeting of the rich and the powerful, the movers and shakers, the owners and the bestowers. The Davos forum, a ‘jolly’ of excessive proportions and great expectations, is limited, however, by the constricted view of its committed cohort and the exigent nature of its economic environment.
What takes place at Davos, or purported to have done so, is selectively reported to the world (not all journalists are given access to all events at the forum). Inevitably, the foundation hosting the Davos forum produces a series of research reports and engages its members in sector-specific initiatives. Just as inevitably, however, these reports and initiatives rarely make their way into the public forum. The WEF and its annual escapade in Davos is a vision of capitalism in action, whilst the stated mission of the WEF is often difficult to square with its proposed or actual outcomes.
Davos 2018 is being held against the backdrop of the collapse of the Carillion Construction and Services Company in the UK. The Carillion affair has exposed how ‘government outsourcing is failing the public by delivering poor quality public services, exploiting workers and relying on the tax-payer to prop up unsustainable business models.’
One editorial opined that ‘the scandal (of the Carillion collapse) goes to the heart of state-aided casino capitalism which profits hedge fund speculators when firms fail and subsidizes stock market gambles with public cash – and taxpayers pick up the bills when it fails’. Labour leader Jeremy Corbyn called it ‘a watershed moment’. The 2007-08 collapse of banks should have been a turning point – sadly it was not. One wonders to what extent this form of outcome, with its roots in the kind of capitalism championed by the WEF, is ever on the agenda at the Davos forum!
One author who had a keen insight into matters related to the foregoing – and possessed the background and expertise to justify that insight – was Professor Stephen Haseler.
Professor Stephen Haseler died in July, 2017. He was a prolific author – writing on issues of law, politics and political parties, international relations, democracy, economics and inequality, powerful and wealthy elites, and, increasingly in his later years, the UK’s role in the European Community. Prior to his sudden death, Stephen Haseler was the Director of the Global Policy Institute at the London Metropolitan University. He was a social democrat and a republican.
In 2010, Professor Haseler published a book called Meltdown UK: There is Another Way. This book had precedents in two previous publications, The Super-Rich (2001) and Meltdown (2008). In many ways, these two books were prescient warnings of what was to come. The central focus of the 2010 book is the great financial crash of 2007-8, an event of world-changing implications.
Professor Haseler tells the story of how Britain’s leaders – from Margaret Thatcher to Tony Blair – through arrogance and recklessness turned Britain into an ‘island experiment’ for global finance and ‘market madness’. The great banking crisis in 2007-08 caused economic turmoil, the price for which the UK, amongst other economies, is now paying. He considers that the UK was the laboratory for the whole global neoliberal revolution.
Despite government action in 2008 following the Wall Street crash, emerging changes in the financial system – including bail-outs, part-nationalization, initial stimulus packages – though necessary at that time, have not worked. Banks remain largely unreformed and recovery is proving to be elusive, even to the extent that, at the time of the publication of the book, the West stood on the brink of another, the ‘double-dip’, recession. The cause of this is that the 2008 measures did not break sufficiently with the thinking of the governing market consensus. It is sobering to realize that there have been some seven Davos forums since 2010 and the publication of Meltdown UK: There is Another Way.
Professor Haseler’s standpoint is that Britain’s contemporary economy is unbalanced, service-based, financialized and highly globalized. The UK is a low-tax-haven, servicing off-shore economies. Further, and precariously, Britain’s political and financial class is ill-prepared to deal with the new and oncoming crisis.
In support of the foregoing, the argument of the book leads from the unbounded power of the City of London, through the route of free trade and global capital, to the attractions of these directions to leaders such as Thatcher and Blair. Then, following the financial crash of 2007-8, the British faced a crisis in jobs, debt disaster, broken British capitalism and a ‘socially useless system’.
In a telling postscript, Stephen Haseler indicates that the end result of this is that ‘the UK would enter a self-defeating and self-lacerating downward spiral, with increasing unemployment, threadbare welfare services, dashed expectations and low morale – possibly even social conflict.’ It can be left to the reader’s observations and judgment as to whether any of this has transpired in the UK since the book was written – in 2010. Notwithstanding, Professor Haseler suggests a bundle of remedies for the situation.
The government should use public spending in order to eventually eradicate national debt. In the event, he suggests, this process would threaten to destroy British national life. The solution to this threat would be to re-engage, re-embrace, social democracy – rejecting the neoliberal model – with the objectives of job priority, growth and the extension of wealth in the West. This will require a stronger state that grapples with inequality, as well as radical democratic reform and, as expected of a convinced pro-European, deeper European coordination.
Further, Professor Haseler believes that Wall Street and the City of London are no longer in the position where they can lecture on financial management. Both seem to be oblivious to the damage they have caused, and are still causing, to the world economy – the UK including. They should make way for a new course to be charted and followed by the financial institutions.
A central contention of this book, Meltdown UK: There is Another Way, is that the UK’s economic crisis is the result of the obsession of Britain’s elites with a ‘global role’. Allied to ‘market extremism’ this becomes a ‘pathology’. There are those within the British establishment who still harbour imperialistic illusions – undiminished during the thirty year period of increasing British weakness and vulnerability under the leadership of Thatcher, Major and Blair.
This is a book that clears away the haze of those years, a book that deserves to be read.
One commentator gave a short and sharp review of the book when stating that… ‘This is a well written, excellent book that tells the truth about the greedy bankers who caused the financial crash and the politicians who let them do so – most of which has been swept under the carpet by mainstream media.’ One might also add that that the reality of the situation is unlikely to be intimately discussed at the Davos forum – in January, 2018, or any other year!